Bitcoin spot ETFs amass $4.5 billion in trading volumes

Bitcoin spot ETF debut: On the inaugural trading day of several new Bitcoin (BTC) exchange-traded funds (ETFs), major financial entities including BlackRock, Grayscale, and Fidelity emerged as leading participants, amassing significant trading volumes. However, one issuer faced an unforeseen delay in starting its operations.

According to the media reports, the collective trading volume for ten spot Bitcoin ETFs surpassed a substantial $4.5 billion on their debut trading day.

BlackRock's iShares Bitcoin ETF, known as the iShares Bitcoin Trust (IBIT), stood out, recording a trading volume of more than $1 billion, which is equal to 22 per cent of the overall volume for the group. Despite this robust performance, IBIT concluded the day with a 4.69 per cent decline in its value. 

In a closely contested scenario, Fidelity's spot Bitcoin ETF denoted as FBTC, garnered a notable trading volume of approximately $685 million on its first day.

Grayscale's Bitcoin ETF, trading under the ticker GBTC, accumulated an impressive total volume of $2.2 billion. This investment product represents a transformation of Grayscale's pre-existing Bitcoin Trust.

Regulatory implications

Hashdex encountered regulatory impediments, preventing it from joining the ranks of spot Bitcoin ETFs for the day. Although the US Securities and Exchange Commission (SEC) sanctioned Hashdex's 19b-4 filing for listing its spot ETF on American stock exchanges, the regulatory body did not activate its S-1 form. Consequently, Hashdex's "DEFI" fund continues to operate solely as a futures-based ETF, with the company clarifying that its portfolio currently lacks any spot Bitcoin holdings.

It's crucial to underscore that trading volume encompasses both asset inflows and outflows, thereby offering an incomplete representation of the day's trading dynamics between purchases and sales.

Senior Bloomberg ETF analyst Eric Balchunas posited that a significant portion of GBTC's trading activity likely involved divestment, as investors transitioned towards newer, cost-effective alternatives like BlackRock's and Fidelity's offerings. This perspective was corroborated by his colleague James Seyffart.

Migration to spot-based alternatives

Simultaneously, the ProShares Futures Bitcoin ETF (BITO) recorded a surge in trading activity, amassing a total volume exceeding $2 billion. Analysts speculate that this trading surge predominantly involved selling activities, indicative of investors transitioning from futures-based Bitcoin exposure to more cost-efficient and less volatile spot-based alternatives.

Offering further insights, Timothy Peterson, an investment manager at Cane Macro, projected that the cumulative buying across these ETFs necessitates the acquisition of approximately 47,000 Bitcoin, valued at $2.1 billion based on prevailing market rates.

Balchunas indicated that a comprehensive understanding of the ETFs' impact on Bitcoin acquisitions would likely materialise by the morning of January 13, shedding light on spot market inflows.